Economic News

[FHBH12]

Bullish outlook on M'sian economy
Economists upgrade forecasts on unexpectedly strong Q3 growth of 5%
BY S JAYASANKARAN IN KUALA LUMPUR
PUBLISHED NOVEMBER 20, 2013

ECONOMISTS have turned more bullish on the Malaysian economy as a result of its unexpectedly strong showing in the third quarter.

They have upgraded their forecasts, and one has even dismissed the second quarter's sharply reduced current account surplus on the balance of payments as an "abnormal", one-off glitch.

Malaysia's growth accelerated to 5 per cent in the third quarter, above the street's 4.7 per cent, and sharply higher than the 4.4 per cent posted in the second quarter. The expansion was largely driven by domestic demand and a turnaround in exports.

The figures suggest that, despite criticism from rating agencies such as Fitch and an uncertain global economy, the Malaysian economy remains resilient, and continues to maintain steady economic growth.

Indeed, Bank of America-Merrill Lynch upgraded its 2013 forecast to 4.6 per cent from 4.3 per cent previously; it has also revised its 2014 estimate to 5 per cent from 4.8 per cent. Both estimates fall within government estimates.

After second-quarter figures revealed that the country's current account surplus on its balance of payments had shrunk to less than RM3 billion (S$1.2 billion), economists began suggesting that the country could once again experience a twin deficit situation.

This had happened during the 1998 Asian crisis, when Malaysia had both a budget deficit and a current account deficit on its balance of payments. It exacerbated the run on the ringgit.

But those fears seem to have been largely dispelled, with the third quarter racking up a current account surplus of almost RM10 billion on the back of a stronger trade surplus - RM25.8 billion from RM18.7 billion in the second quarter.

Chua Hak Bin, a senior economist with BoA-Merrill Lynch, said: "The export recovery has quelled fears of the current account slipping into a deficit.
"Furthermore, export commodity prices are ticking back up, indicating improving terms of trade. Palm oil prices are up about 21.6 per cent from lows."

Barclays Bank was more emphatic, saying that the country's current account surplus had stabilised. It said in a statement over the weekend: "We maintain that the drop in the second quarter surplus was abnormal, and we see the third-quarter numbers as being more reflective of the underlying trend."

All this earned a polite "I-told-you-so" from Wahid Omar, the minister in charge of the Economic Planning Unit, who echoed Barclays' sentiment. He said yesterday: "It was a one-time concern raised by a few economists as well as rating agencies - Fitch in particular."

He told reporters after delivering the keynote address at the Second National Statistics Conference 2013 in Kuala Lumpur: "With this (strong current account balance), there should not be any fear about Malaysia getting into a twin-deficit situation."

Barclays was even more bullish on the Malaysian economy, predicting that the country would grow by 5.7 per cent next year, higher than Putrajaya's own assessment of 5 to 5.5 per cent.

Looking ahead, the bank expects Malaysia's current account to be around RM38.4 billion or 3.9 per cent of gross domestic product.

http://www.businesstimes.com.sg/premium/malaysia/bullish-outlook-msian-economy-20131120

 

[FHBH12]

I'm quite bullish on Iskandar properties too

 

[FHBH12]

future development to concentrate at senai / zone E for aviation industry.

http://www.starproperty.my/index.ph...r-to-soar-irda-to-develop-it-as-aviation-hub/

Kulai properties are still very cheap. I can still see $1xx RM psf for landed properties. It should go up once Senai starts to boom.

 

[malpaso]

Kulai properties are still very cheap. I can still see $1xx RM psf for landed properties. It should go up once Senai starts to boom.

yeah but the houses & environment there you may not like.
with msc cyber city coming, should at least see some rental demand filter down to our side?

 

[potter]

Was thinking to hoot a bigger one there to keep horse, but quite far out frm sg.. siong.
But near to debulau. :p

 

[malpaso]

Was thinking to hoot a bigger one there to keep horse, but quite far out frm sg.. siong.
But near to debulau. :p

hahaha. what is debulau?

 

[potter]

hahaha. what is debulau?

地不佬. :p

 

[FHBH12]

Tebrau: http://en.wikipedia.org/wiki/Tebrau

Tebrau or Teberau is a largest mukim (sub-division) in Johor Bahru District, Johor, Malaysia.

Townships
Bandar Dato' Onn
Adda Heights
Taman Delima
Taman Daya
Setia Indah
Taman Mount Austin
Desa Tebrau
Taman Istimewa
Taman Bukit Mutiara
Taman desa mutiara(flet house)

Villages
Kampung Kangkar Tebrau
Kampung Pandan
kampung Keling (no more,entrance at spare part Kangkar)

http://en.wikipedia.org/wiki/Tebrau

 

[whoami]

....deleted post....

 

[FHBH12]

Fed's Bullard: December taper 'definitely on the table'
PUBLISHED NOVEMBER 21, 2013

[WASHINGTON] Recent US economic data is looking better and a solid jobs report for November would increase the likelihood that the Federal Reserve would start to scale back bond buying at its meeting next month, a senior Fed official said on Wednesday. "It is definitely on the table, but it is going to depend on the data," James Bullard, president of the St. Louis Federal Reserve Bank, told Bloomberg television. "A strong jobs report, I think, would increase the probability some for a December taper." Bullard is a voting member of the Fed's policy-setting committee this year.

The central bank at its October policy meeting voted to keep buying bonds at an US$85 billion monthly pace, delaying a decision to start scaling back the program until it saw more evidence of a durable recovery that could sustain job creation.

The Fed had stunned markets in September when it opted to keep buying bonds at the same pace, after allowing expectations to harden over the summer that it was getting set to taper. Yields on longer-term bonds, which had risen sharply on expectations of tapering, snapped back when the Fed opted to stick with the US$85 billion pace.

Mr Bullard said that when the Fed does eventually decide to start reducing bond purchases, markets would be better prepared. "If we taper because we see a stronger economy, I think the markets will swallow that without a problem," he said.

The US central bank has held interest rates near zero since late 2008 and quadrupled its balance sheet through three huge bond-buying campaigns aimed at spurring growth and hiring by holding down long-term borrowing costs.

Mr Bullard said October's employment report, which showed the creation of 204,000 new jobs, and an upward revision in the number of jobs created in the previous months had raised average job creation. "Now we're looking at 200,000 jobs per month over the last three months. That's a lot different picture than we were looking at before the jobs report," he said. "This cumulative progress argument is the most powerful argument for tapering." The Fed spelled out when it launched the latest round of bond buying in September 2012 that it would continue until policymakers saw a substantial improvement in the outlook for the labor market. Bullard argued this was now the case. "I think we have met that test. And the only question is, can we sustain that going forward and what about inflation?" Mr Bullard said.

Mr Bullard had dissented in June against the Fed's decision to talk about tapering bond buying because he was concerned that inflation was too low.
The US consumer price index for October rose by 1.0 per cent on a yearly basis, data released earlier on Wednesday showed. The Fed has a 2 per cent medium-term inflation goal. Its preferred gauge of price pressures, the PCE price index, is reporting even more muted levels of inflation.

While an improving economy has policymakers thinking about paring back some of their monetary stimulus, a turn for the worse would prompt discussion about expanding the central bank's toolkit for fostering stronger growth.

Mr Bullard said one option would be for the Fed to pay a lower rate of return on the money banks park at the institution, and perhaps even a negative rate of return. "The committee has debated this repeatedly over the last four or five years," he said, saying the option was not currently on the table. "If the economy took a downturn then I think we would look at it a lot harder," he said.

Making banks pay to deposit cash with the central bank overnight is policy option is currently under consideration at the European Central Bank, news agency Bloomberg said on Wednesday, citing unnamed sources. - Reuters

http://www.businesstimes.com.sg/bre...lard-december-taper-definitely-table-20131121

 

[FHBH12]

Barclays sees ringgit as undervalued
It points to Moody's outlook upgrade of Malaysia to positive from stable
BY S JAYASANKARAN IN KUALA LUMPUR
PUBLISHED NOVEMBER 22, 2013

THE ringgit is undervalued as it has underperformed its peers since Prime Minister Najib Razak's Budget almost a month ago, a British bank said.

In a report yesterday, Barclays Bank said the currency's underperformance stemmed from doubts over the country's "fiscal credibility". But it said any such doubt should now be "diminished" after international rating agency Moody's raised Malaysia's sovereign outlook to "positive" from "stable" in a report released on Wednesday.

The news should boost Mr Najib's credibility as a finance minister; he has been flayed by critics who have accused him of going on a profligate spending spree to boost the Barisan Nasional coalition's popularity. In the run-up to the May 5 general election, government debt had ballooned to more than 54 per cent of GDP, just a whisker away from the legally mandated debt ceiling. Although the BN won, it did so with a weaker mandate.

In July, global rating agency Fitch had affirmed Malaysia's investment-grade sovereign rating but cut its outlook to "negative" from "stable". That raised the level and intensity of the criticism against Mr Najib.

The premier responded by first raising fuel prices - and thus cutting subsidies by more than RM3 billion (S$1.2 billion) a year - and then presenting an October budget that included a goods and services tax by 2015; the removal of sugar subsidies; and a promise to take the budget deficit down to 3.5 per cent of gross domestic product next year.

Despite that, Fitch remained unconvinced immediately after the budget on Oct 25 and maintained its "negative" rating outlook on the country. But on Wednesday, Moody's did the opposite while affirming the country's investment-grade A-rating.

The agency cited the improved prospects for fiscal consolidation and reform, along with macroeconomic stability despite the weaker external demand.
Moody's also said the subsidy cuts and the impending GST would "improve debt dynamics and, hence, support today's action". It noted that Malaysia's limited external debt and the depth of local capital markets mitigated its higher stock of debt relative to its peers.

The agency said that Malaysia might receive a ratings upgrade if it continued to outperform its peers economically especially in its debt management. Even so, it cautioned that an outlook change to "stable" or even "negative" could be triggered if there was "a significant deterioration in Malaysia's debt dynamics possibly arising from an inability to successfully implement fiscal reform as well as adverse shocks to the country's funding system". It added, however, that such a situation was "unlikely".

Moody's seemed to set great store on comparisons with Malaysia's peers. "As compared with other A-rated countries, Malaysia has generally exhibited faster growth, lower inflation, and a more robust balance of payments over the past five years," it said.

Mr Najib's Economic Transformation Programme (ETP) was singled out for praise.

"Since the first quarter of 2012, Malaysia's real GDP growth has averaged 5.1 per cent year on year, outperforming other A-rated countries despite weak commodity prices and weak external demand," it noted. "Driven in part by the government's ETP, the robust level of domestic demand has offset the drag from falling exports."

But could Malaysia get a ratings upgrade?

Barclays thinks not.

"Given the timeline for the implementation of reforms, an upgrade over the next nine to 12 months is unlikely," it concluded.

http://www.businesstimes.com.sg/premium/malaysia/barclays-sees-ringgit-undervalued-20131122

 

[FHBH12]

Concord eyes dedicated oil storage at Johor terminal
BY PAULINE NG IN KUALA LUMPUR
PUBLISHED NOVEMBER 22, 2013

SHOULD things go as planned, Singapore-based Concord Energy could well be one of the largest customers of the five million cubic metre Deepwater Terminal Project (PDTP) being developed by Malaysia's Dialog Group in Pengerang, Johor.

The companies signed a memorandum of understanding yesterday to conduct a feasibility study for the proposed development of a dedicated crude oil and petroleum product storage terminal in Pengerang.

A joint press statement said the feasibility study would take about a year and would look into the proposed development, which would come with a dedicated and exclusive storage capacity of up to two million cubic metres and deepwater jetty facilities to enable very large crude carriers access to Concord's facility.

The initial planned capacity is for up to one million cubic metres and is likely to come under the second phase of the PDTP if the parties come to an agreement.

The first phase of the deepwater terminal involves the construction of an initial storage capacity of about 1.3 million cubic metres together with six berths. Constructed at a cost of RM2 billion (S$781,000), it will be operational by next year.

The PDTP is being built on 500 acres of land, and will offer five million cubic metres of capacity for petroleum and petrochemical products when completed.
The deepwater terminal has already secured customers for the first phase, Dialog executive chairman Ngau Boon Keat had told media previously, but he has not named them.

Johor Menteri Besar Khaled Nordin and Mr Ngau witnessed the MOU signing by Dialog group managing director for Malaysia business operations Mustaffa Kamal Abu Bakar and Concord managing director Nasrat Muzayyin in Petaling Jaya yesterday.

"Asia is a significant net importer of crude and petroleum products and this venture will be meeting future demand for storage capacity along the major trade flow routes in Asia. The facility will be a dedicated make bulk/break bulk crude and petroleum product storage terminal with associated blending facilities," said Mr Muzayyin.

Integrated oil services company Dialog sees deep-watered Pengerang as a natural "Rotterdam of Asia". Its vision had seemed less certain when national oil company Petronas said it might have to reconsider plans for a massive RM60 billion refinery and petrochemical integrated development (Rapid) in Pengerang.

Its decision will only be made next year but Mr Ngau has said he does not expect Petronas's decision to affect the PDTP even though it would benefit more should Rapid proceed. The PDTP is owned by Pengerang Independent Terminals Sdn Bhd, which in turn is co-owned by Dialog and its partners, Royal Vopak and the State Secretary of Johor Inc.

http://www.businesstimes.com.sg/pre...dedicated-oil-storage-johor-terminal-20131122

 

[FHBH12]

Crunch time for local industries
By Amy Chew
Friday, 22 Nov 2013, 01:00 AM
- See more at: http://www.focusmalaysia.my/Mainstream/Crunch-time-for-local-industries#sthash.m8XBzvvK.dpuf

Effective Jan 1 next year, Indonesia will introduce a minimum monthly wage of RM800 in Jakarta that will keep many of its workers in the country and worsen the labour crunch in key sectors in Malaysia like plantation, construction and manufacturing.

The new minimum wage in the Indonesian capital is close to Malaysia’s own minimum wage of RM900 in the peninsula and RM800 in Sabah and Sarawak. Indonesia supplies nearly half of Malaysia’s seven million foreign workers. Malaysian employers thus face the task of either increasing their workers’ wages and incurring higher costs, or see their factories and projects delayed. - See more at: http://www.focusmalaysia.my/Mainstream/Crunch-time-for-local-industries#sthash.m8XBzvvK.dpuf

 

[FHBH12]

I'm expect property prices in Iskandar to stage a bull run next year due to inflation from:

(i) Developers pricing in effect of GST
(ii) Reduction in subsidies (e.g. fuel)
(iii) Labour crunch from illegal workers arrests, construction boom in Iskandar and reduction in supply of Indonesian workers
(iv) Developers focusing on launching >$1 mil RM properties for foreigners to buy
(v) Economic recovery in US, EU, China and Japan resulting in stronger economy in Malaysia

 

[malpaso]

Crunch time for local industries
By Amy Chew
Friday, 22 Nov 2013, 01:00 AM
- See more at: http://www.focusmalaysia.my/Mainstream/Crunch-time-for-local-industries#sthash.m8XBzvvK.dpuf

Effective Jan 1 next year, Indonesia will introduce a minimum monthly wage of RM800 in Jakarta that will keep many of its workers in the country and worsen the labour crunch in key sectors in Malaysia like plantation, construction and manufacturing.

The new minimum wage in the Indonesian capital is close to Malaysia’s own minimum wage of RM900 in the peninsula and RM800 in Sabah and Sarawak. Indonesia supplies nearly half of Malaysia’s seven million foreign workers. Malaysian employers thus face the task of either increasing their workers’ wages and incurring higher costs, or see their factories and projects delayed. - See more at: http://www.focusmalaysia.my/Mainstream/Crunch-time-for-local-industries#sthash.m8XBzvvK.dpuf

good. ever since the deluge of indonesian laborers *many illegal* into malaysia a good 2 decade ago, crime has been steadily worsening in MYS. Glad to see these people go.

 

[FHBH12]

good. ever since the deluge of indonesian laborers *many illegal* into malaysia a good 2 decade ago, crime has been steadily worsening in MYS. Glad to see these people go.

Good to see them go, after my Desa Tebrau house is constructed by mid 2014 Indigenous indonesians are known to be more violent sometimes, from historical records.

I expect Blangadesh workers to take over the construction. Generally these guys are more hardworking and less inclined to resort to crimes. However they may not be as skilled. With wages going up and skills coming down, do expect quality and furnishing of houses (in general) that VP in 2015 onward to come down a bit.

 

[kopikong99]

good. ever since the deluge of indonesian laborers *many illegal* into malaysia a good 2 decade ago, crime has been steadily worsening in MYS. Glad to see these people go.

Some of these *illegal Indonesian workers* go around with fake ID and tried to get jobs direct with owners. These are the ones where there is no control and no way to track them as there is a unspoken rule amongst themselves Indonesians not to squeal on their countrymen. Their modus operandi is to give you a ridiculous low price to bait you. Following will be asking for more money or the work stopped and everything will be created a mess. They also would be indirectly violent especially by tagetting your other family members to harrass. Even as sub-contractors with renovation contractor, their work need to be watched 24 hours as their work is all shoddy when on their own.
Agree with you that these are a worst lot in construction and renovation. When they got no work, they just turn to crimes to survive. The place definately would be safer with less of these illegals.

 

[malpaso]

Some of these *illegal Indonesian workers* go around with fake ID and tried to get jobs direct with owners. These are the ones where there is no control and no way to track them as there is a unspoken rule amongst themselves Indonesians not to squeal on their countrymen. Their modus operandi is to give you a ridiculous low price to bait you. Following will be asking for more money or the work stopped and everything will be created a mess. They also would be indirectly violent especially by tagetting your other family members to harrass. Even as sub-contractors with renovation contractor, their work need to be watched 24 hours as their work is all shoddy when on their own.
Agree with you that these are a worst lot in construction and renovation. When they got no work, they just turn to crimes to survive. The place definately would be safer with less of these illegals.

happening for 20 year already. in fact , KL if you walk around you see many dodgy people dunno where the hell they come from. any more i don't want to say. if malaysia toughen up and kick all these people out, would be good. maybe i will be prouder of my malaysian passport.

 

[FHBH12]

Malaysia expects rise in CPI after energy tariff hike
But Bank Negara governor says impact on prices will be temporary
Published December 05, 2013

[KUALA LUMPUR] Businesses and households can expect costs to go up, as inflation trends higher in the wake of the new electricity tariffs effective Jan 1 for the peninsula as well as Sabah and Labuan.

Bank Negara governor Zeti Akhtar Aziz said an early estimate showed that there could be a 0.4 per cent increase in the consumer price index (CPI), which measures headline inflation, including volatile food and energy costs, when the new electricity rates become effective.

Sarawak is not affected by the hike as its power supply and distribution networks are managed by state-owned Sarawak Energy Bhd. Economists expect inflation to rise above 3 per cent next year after picking up pace in recent months, as the government consolidates spending with cuts in subsidies such as fuel, where the RON95 petrol and diesel prices were raised by 20 sen each on Sept 2 to RM2.10 (S$0.82) and RM2 per litre, respectively.

Data from the Statistics Department showed the CPI rose to 2.8 per cent year-on-year in October from 2.6 per cent in September and 1.9 per cent in August.

"Right now, it would be in the region of 3 per cent, but we don't know what other adjustments are to take place," Dr Zeti told reporters at the Leadership Energy Summit Asia 2013, The Star reported.

However, she said the tariff hike's impact on prices would only be temporary based on the central bank's assessment of the trend.

"This is something that needs to be done because it is not sustainable when the market price changes, and therefore, it is important that Malaysia makes such adjustments," she said.

The rise in tariffs, announced by energy, green technology and water minister Maximus Ongkili on Monday, would see those in the peninsula paying an average of 14.89 per cent, or 4.99 sen, more per kilowatt-hour (kWh) to 38.53 sen, while for Sabah and Labuan, the average tariff would rise 16.9 per cent, or five sen, per kWh to 34.52 sen.

For industry users, the average tariff will be raised by 16.85 per cent to 36.15 sen per kWh, while commercial users will pay 47.92 sen, up from 41.01 sen.

Citigroup economist Kit Wei Zheng said in a report that Bank Negara might not be in a hurry to raise benchmark interest rates, which stand at 3 per cent, as there were few signs of demand-pull inflation or second-round effects after the September fuel price hike.

He pointed out that recent comments from Dr Zeti suggested that the central bank might be prepared to tolerate what it viewed as a "temporary" rise in inflation (of up to 3.3 per cent in the first quarter of next year) due to supply-side cost-push factors, while the growth outlook remains uncertain.

Mr Kit said hikes in the benchmark interest rates had become increasingly contingent over the growth outlook firming up.

He expected a 25-basis point rate hike in May, with another 25-basis point hike in July in anticipation of inflation hitting 3.8 to 3.9 per cent from June/August.

He said considerations that the central bank would have to take into account included the ability of households to service debt, as well as the direct and second-round inflationary impact of the 6 per cent goods and services tax effective April 2015.

"Going forward, our base case is for five sen to 10 sen per litre fuel price hike by year-end and for 20 sen per litre hike before July 2014. As we had argued in our assessment of budget 2014, we suspect policymakers would probably opt for gradual but somewhat more frequent and frontloaded hikes."

http://www.businesstimes.com.sg/pre...ts-rise-cpi-after-energy-tariff-hike-20131205

 

[FHBH12]

Britain to tax foreign property investors from 2015: Osborne
PUBLISHED DECEMBER 05, 2013

[LONDON] Britain will impose capital gains tax on foreign investors selling homes that are not their primary residence, finance minister George Osborne said on Thursday as the government moved to curb soaring house prices in London.

"It's not right that those who live in this country pay capital gains tax when they sell a home that is not their primary residence - while those who don't live here do not," Mr Osborne said in a twice-yearly budget statement to parliament.

"That is unfair. From April 2015, we will introduce capital gains tax on future gains made by non-residents who sell residential property here in the UK.
Property prices in London have jumped by about 10 per cent in the last 12 months and increases in some parts of the capital have been greater.

Much of the demand has come from foreigners looking to buy their second home or wanting to tie up their cash in London, which has been seen as a safe haven in recent years amid economic and political turmoil in Europe and the Middle East.

Britain's Deputy Prime Minister Nick Clegg said last month the government was considering the change to end the exemption from capital gains tax for foreign property investors.

Britons pay capital gains tax - typically at 28 per cent - on any profit from selling property that is not considered their primary residence. - Reuters

http://www.businesstimes.com.sg/bre...eign-property-investors-2015-osborne-20131205